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Tutorial 6

The document provides information and questions related to bank reconciliation. It includes: 1. Factors that can cause a difference between a bank balance and cash account balance are outstanding deposits/checks and bank fees/interest. 2. Preparing bank reconciliation adjusts the cash account balance to match the bank statement balance. 3. Adjusted bank balance is RM19,340 - outstanding checks of RM7,160 + deposit in transit of RM2,500 + note collected of RM8,250 = RM22,930. Necessary adjusting entries are made.

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344 views3 pages

Tutorial 6

The document provides information and questions related to bank reconciliation. It includes: 1. Factors that can cause a difference between a bank balance and cash account balance are outstanding deposits/checks and bank fees/interest. 2. Preparing bank reconciliation adjusts the cash account balance to match the bank statement balance. 3. Adjusted bank balance is RM19,340 - outstanding checks of RM7,160 + deposit in transit of RM2,500 + note collected of RM8,250 = RM22,930. Necessary adjusting entries are made.

Uploaded by

Wan Lin
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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ACT 2112 SEMESTER I 2011/2012 TUTORIAL 6 1. The balance of Cash is likely to differ from the bank statement balance.

What two factors are likely to be responsible for the difference? 2. What is the purpose of preparing a bank reconciliation? Question 3 The following data were gathered to use in reconciling the bank of West Company: Balance as per bank RM 19,340 Balance as per company records 6,480 Bank service charge 50 Deposit in transit 2,500 Note collected by bank with RM250 interest 8,250 Outstanding checks 7,160 i. ii. What is the adjusted balance on the bank reconciliation? Journalize the necessary entries for West Company based on the bank reconciliation.

Question 4 For each of the following items, show the adjustments to be made in the bank reconciliation statement using the symbol (+) or (-) under each respective balance. Items a) Bank service charge b) Deposit in transit c) Dishonoured cheque d) Unpresented cheque e) Customer paid directly to the bank f) Charge overstated by bank g) Charge understated by bank h) Deposit overstated in journal i) Deposit understated in journal j) Payment overstated in journal k) Payment understated in journal i) Cheque returned to customer Balance as per bank statement (+) or ( - ) Balance as per cash account (+) or ( - )

Question 5 The cash accounts for Mountain Bike Co. at 1 July 2010 indicated a balance of RM12,470. During July, the total cash deposited was RM26,680 and checks written totaled RM31,500. The bank statement indicated a balance of RM16,750 on 31 July. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a) Checks outstanding totaled RM12,850. b) A deposit of RM5,100, representing receipts of 31 July, had been made too late to appear on the bank statement. c) The bank had collected for Mountain Bike Co. RM2,675 on a note left for collection. The face of the note was RM2,500. d) A check for RM370 returned with the statement had been incorrectly charged by the bank as RM730. e) A check for RM320 returned with the statement had been recorded by Mountain Bike Co. as RM320. The check was for the payment of an obligation to Rain Co. on account. f) Bank service charges for July amounted to RM25. g) A check for RM850 from Hallock Co. was returned by the bank because of insufficient funds. Required: i. Prepare a bank reconciliation as of 31 July. ii. Journalize the necessary entries. The accounts have not been closed. Question 6 STRAW CO. Bank Reconciliation April 30, 2010 Cash balance according to bank statement Add: Outstanding checks No. 315..................................................... 360..................................................... 364..................................................... 365..................................................... Deduct: Deposit of April 30, not recorded by bank Adjusted balance.............................................. Cash balance according to companys records Add: Proceeds of note collected by bank: Principal............................................ Interest.............................................. RM 11,320 RM450 615 850 775

2,690 14,010 3,330 RM 10,680 RM 7,003

RM4,000 120

4,120

Service charge

18

4,138 11,141 2,745 RM 11,960

Deduct: Check returned because of insufficient funds.................... 945 Error in recording 20 April deposit of RM5,300 as RM3,500... 1,800 Adjusted balance.............................................. Required: Identify the errors in the following bank reconciliation.

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